New Trade Measures Replace Temporary Global Tariffs, Trigger International Backlash and Set the Stage for Legal and Economic Challenges
President Donald Trump imposed new tariffs on 60 economies on July 24, shortly after midnight, citing alleged forced-labor violations.
The White House proposed the latest round of tariffs last month after an investigation concluded that dozens of U.S. trading partners had failed to curb the use of forced labor in their supply chains.
Administration officials described the move as “the most sweeping international labor rights action the United States has ever taken, that any country has ever taken.”
The announcement follows the president’s decision to impose a 25 percent tariff on imports from Brazil and his threat to introduce a 50 percent tariff on nearly $20 billion worth of Canadian goods.
Tariff Basics
The new tariff regime replaces the president’s temporary 10 percent global tariff, which was introduced after the Supreme Court struck down Trump’s emergency tariff authority in February.
Those temporary duties expired as the new measures took effect.
Under the new framework, tariff rates range from 10 percent to 12.5 percent, covering more than 99 percent of U.S. trade, according to a fact sheet released by the Office of the U.S. Trade Representative.
The measures include several exemptions for goods already in transit, as well as products covered under other trade agreements and tariff authorities.
A Federal Register notice also lists numerous exemptions for products the United States cannot produce domestically or goods whose taxation could create broader economic volatility, including coffee, natural gas, and oil.
Markets such as the European Union, Indonesia, and Mexico will be subject to the lower tariff rate, while economies including Australia, China, and the United Arab Emirates will face the higher rate.
Section 301 Authority
The tariffs will be implemented under Section 301 of the Trade Act of 1974.
The provision authorizes the U.S. Trade Representative to investigate and respond to unfair trade practices by foreign governments.
It also allows the trade representative to impose retaliatory measures, particularly tariffs, to encourage policy changes.
The latest tariffs stem from a months-long investigation conducted by the Office of the U.S. Trade Representative.
Officials concluded that the failure to prohibit and effectively enforce restrictions on imports produced with forced labor constitutes an unreasonable practice that places a burden on U.S. commerce.
“We commit to continuing to use tariffs and to negotiate deals to support the reindustrialization of our economy, protect American workers, and increase their wages and shrink our trade deficit,” U.S. Trade Representative Jamieson Greer said during a Senate Finance Committee hearing on July 22.
“Our policy remains the same. The specific authorities this administration is using have changed, but the trade strategy has not.”
International Pushback
Several countries rejected the administration’s allegations.
Swiss business association Economiesuisse said in a July 24 statement that the tariffs are based on “unfounded” claims.
“There is no evidence that Swiss supply chains are being used to smuggle goods produced through forced labour into the U.S. market,” the organization said.
“Forced labor is already prohibited in Switzerland under constitutional, civil and criminal law.”
Switzerland will face a 12.5 percent tariff under the new policy.
Canada, which was assigned a 10 percent tariff rate, also defended its labor standards.
“Canada has one of the world’s most robust frameworks to prevent and address forced labor and shares the United States’ objective of ensuring goods produced with forced labor do not enter our supply chains,” Dominic LeBlanc, Canada’s Minister for Canada–U.S. Trade, said in a statement.
LeBlanc added that Ottawa will continue discussions with Washington on the issue in the coming weeks.
“We will continue engaging constructively with the United States on this matter, as well as other outstanding issues, over the coming weeks to the mutual benefit of our citizens,” he said.
New Zealand Prime Minister Christopher Luxon described the tariffs as “extremely disappointing.”
“The U.S. investigation did not provide meaningful evidence to support claims in relation to forced labor. Tariffs are not the way—they drive up costs and uncertainty for businesses,” Luxon wrote on X.
Washington imposed a 12.5 percent tariff on imports from New Zealand while exempting beef and kiwifruit.
The Brazilian government echoed similar concerns, describing the latest tariffs as “completely arbitrary and unjustified.”
Economic and Legal Outlook
The latest tariff measures are expected to remain a key focus for global financial markets, according to Carsten Brzeski, Global Head of Macro at ING.
However, Brzeski said developments over the past year suggest that tariff headlines have been “more disruptive than the reality.”
“The world has also adjusted to at least some degree of higher trade barriers,” Brzeski wrote in a research note. “As a result, while a fresh round of tariff threats may disrupt the summer lull, it's unlikely to have the same disruptive power as it did last year.”
Although U.S. stocks fell sharply during the July 23 trading session, market participants reacted more strongly to rising crude oil prices than to the tariff announcement.
Alan Wolff, a senior fellow at the Peterson Institute for International Economics, argued that the administration’s trade actions are unlikely to significantly reduce forced labor.
According to Wolff, the global economy has already adapted to an environment of higher tariffs, and “there is no evidence that changing the U.S. rationale for them will materially reduce forced labor in other countries.”
He also said the administration’s next major challenge is likely to come in court.
“The Supreme Court is not likely to allow this expansion of the president's retaliatory authority under Section 301 to substitute for the Congress' role in setting tariffs generally,” Wolff wrote.
Meanwhile, Sen. Ron Wyden (D-Ore.) this week introduced the Congressional Trade Powers Reform Act, legislation that would limit the president’s tariff authority and restore greater control over trade policy to Congress.
